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A Registered Retirement Savings Plan (RRSP) is a government approved plan through which you save money for your retirement years and any income or growth you earn is tax deferred until you withdraw money.
When you withdraw funds from an RRSP, your financial institution withholds a portion of the taxes owed and forwards to CRA on your behalf. The rates depend on your residency and the amount you withdraw. For residents of Canada, the rates are:
The tax that was withheld may not always be enough to account for the tax you owe at your tax bracket. You may have to pay more tax on the withdrawal when you include the withdrawal on your income tax and benefit return for that year.
Additional information is available on the Canada Revenue Agency's website.
Important points to remember:
There are two main reasons:
For information on changes to deposit insurance and the transition period if we become a federal credit union, see the notice pursuant to the Disclosure on Continuance Regulations (Federal Credit Unions).